Getting Your Credit Score in Order

Building a favorable credit history is a free fringe benefit that will result in a lifetime asset. However, the rating of your credit history is determined by your timely payments. If you presently do not have established credit, begin small by...

• Applying for credit at a local department store.
• Applying for a small loan at your financial institution.
• Purchasing an item with a down payment and negotiate payments for the balance.

If you are denied credit, ask for the reason why. There are various reasons other than just poor credit history, such as, short length of employment or lack of sufficient income to justify debt. At this time you may want to consider a co-signer, a family member or friend who would be willing to help you establish a credit history and make payments if you default on the obligation. Making payments on time will open future credit possibilities without a co-signer for you. Paying the required payment due on time will guarantee that favorable credit report whenever you may need it.

Once you have established a credit history, finding out what's on your credit report before applying to be pre-approved is an important first step to buying a home. It will give you the opportunity to verify accuracy and review your payment history which may affect the loan rate offered for a mortgage.

If any data on your credit report is inaccurate, notify the credit bureau and ask what procedures are necessary to correct the situation. Be sure you provide any proof you may have and follow-up to verify the information has been corrected. Keep in mind that this process may take a month or so.

If you are having difficulty meeting your monthly debt obligations, it is wise to contact a consumer credit counselor. They can help with establishing a repayment schedule with the creditors and a budget plan for you.

While a favorable credit report is ideal, don't be discouraged if yours isn't. Only you can change your credit rating. Make it your goal and create a budget. Take one step at a time. When you start to see the positive results, pat yourself on the back and enjoy the feeling of accomplishment.

Copyright© 2008 FSBO Publishing Group, Inc., All rights reserved. This material may not be republished without written permission.